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Please complete questions #11-15. Thank you. Fargo Company prepared the following contribution format income statement based on a sales volume of 2,000 units (the relevant

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Please complete questions #11-15. Thank you.

Fargo Company prepared the following contribution format income statement based on a sales volume of 2,000 units (the relevant range of production is 1,000 units to 2,500 units): Sales Variable expenses Contribution margin Fixed expenses Net operating income $55,000 36,000 19,000 10,400 $ 8,600 Required: 1. What is the contribution margin per unit? (Round your answer to 2 decimal places.) 2. What is the contribution margin ratio? 3. What is the variable expense ratio? 4. If sales increase to 2,012 units, what would be the increase in net operating income? (Round your answer to 2 decimal places.) 5. If sales decline to 1,850 units, what would be the net operating income? 6. If the selling price increases by $1.50 per unit and the sales volume decreases by 250 units, what would be the net operating income? 7. If the variable cost per unit increases by $1.25, spending on advertising increases by $2,050, and unit sales increase by 225 units, what would be the net operating income? 8. What is the break-even point in unit sales? 9. What is the break-even point in dollar sales? 10. How many units must be sold to achieve a target profit of $12,100? 11. What is the margin of safety in dollars? What is the margin of safety percentage? 12. What is the degree of operating leverage? (Round your answer to 2 decimal places.) 13. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a % increase in sales? (Round your intermediate calculations and final answer to 2 decimal places.) 14. Assume that the amounts of the company's total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $10,400 and the total fixed expenses are $36,000. Under this scenario and assuming that total sales remain the same, what is the degree of operating leverage? (Round your answer to 2 decimal places.) 15. Assume that the amounts of the company's total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $10,400 and the total fixed expenses are $36,000. Given this scenario and assuming that total sales remain the same. Using the degree of calculated operating leverage, what is the estimated percent increase in net operating income of a 10% increase in sales? (Round your intermediate calculations and final answer to 2 decimal places.) 1. $19000/2000 units = $9.5 a unit 2. $19000/$55000 = 34.5% CMR 3.36000/55000 x 100 = 65.5% 4. $55000/2000Units = $27.5 5.27.5 x 2012 = 55330 x 34.5 = 19089 | 55330 - 19089 = $36241 27.5 x 1850 = $50875 | 50875 x 34.5% = $17552 50875 - 17552 = $33323 6. $1.5 x 1250 7. $36000/2000 = $18 | $18 +1.25 = $19.25 $55000/2000=$27.5 27.5 x 2225 = $61187.5 (19.25 x 2225) = 42831.25 | 10400 + 2050 = 5906.25 NOI 8. 10400/27.5-18 = 1095 units 9. 1095 units x 27.5 = 30112.50 10. 55000-30112.5 = $24887.5 / 55000 = 43.24% 11 12

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